Published: Monday, January 14, 2013 at 8:30 p.m.

Last Modified: Monday, January 14, 2013 at 8:30 p.m.

Many of the details of a private-public partnership that aims to keep Houma's Leonard J. Chabert Medical Center open in the face of state budget woes remain unknown.

But the unprecedented reforms raise mixed reactions among health care experts. Some welcome reform of the troubled state charity hospital system. Others question the transparency of the reforms, undertaken outside the state legislative session and without another safety net for the state's indigent residents in place.

The partnership between Ochsner Health System, Terrebonne General Medical Center and Chabert was announced in December.

The partnership was made necessary because of federal Medicaid reimbursement cuts that followed state cuts totaling about $152 million among the seven state charity hospitals.

Chabert's share is $14.3 million, which officials said would result in 245 layoffs — about a quarter of its staff — and decimate services to the hospital's mostly poor or uninsured patients.

As a part of the deal, Ochsner and TGMC agreed to chip in millions of dollars to help offset that cut. LSU System Executive Vice President Dr. Frank Opelka said Ochsner and TGMC will lease the 80-bed hospital from the state. Chabert employees will work for the partner hospitals and must reapply for their jobs.

Many other details of the partnership remain to be worked out, including how the state will ensure that Chabert continues to care for the state's indigent and uninsured patients when it is being operated by a private entity.

“Those details will come down in the definitive agreements. There are still a lot of questions,” Opelka said. “What kind of expectations do you lay down, and how do you have that accountability?”

The plan is to get a partnership agreement between the three hospitals signed in March, so the deal can go before the Legislature for review. The actual process of transitioning hospital leadership to the private partners probably won't happen until June or July, Opelka said.

“We're excited that we've got a great partner that has a long-standing relationship with Chabert,” Opelka said. “We think this will secure the future of that hospital in the community.”

IN NEED OF REPAIR

Charity hospital systems have been criticized for providing inefficient care for large populations of needy patients.

With only 10 hospitals in the state providing care to the poor, it meant difficult access and sometimes long waits. That can cause problems for patients with chronic illnesses that need regular monitoring, like heart disease or diabetes.

“We are unique in our charity system,” said Milton Bourgeois, CEO of Ochsner St. Anne General Hospital in Raceland and immediate past chairman of the Louisiana Hospital Association. “In other systems, the dollars follow the patient. In Louisiana, the money goes to the facility, and the patients must follow.”

Benjamin Sachs, senior vice president and dean of the Tulane University School of Medicine, said many states have moved away from charity systems. The missions of charity hospitals — caring for the poor and uninsured — have been taken up by not-for-profit hospitals.

Sachs said that reform of the charity system would have been inevitable because they pay for uncompensated patient care by accepting federal disproportionate-share hospital payments, which reimburse hospitals that care of a large number of uninsured and poor patients. These DSH payments will be phased out as the Affordable Care Act expands Medicaid coverage and health-insurance requirements.

HIGH STAKES

The charity hospital system carries a large burden when it comes to indigent care.

Louisiana has one of the highest rates of uninsured residents in the nation, at about 20 percent. It also has some of the strictest income thresholds to qualify for Medicaid.

In Louisiana, an individual making more than $1,200 a year or a family of three making more than $5,000 annually make too much to qualify for Medicaid.

While not a perfect model, the charity-hospital system has ensured that these people are taken care of, said David Hood, secretary of Health and Hospitals under former Gov. Mike Foster.

Gov. Bobby Jindal is refusing to expand Medicaid in the state in 2014 as part of the Affordable Care Act, often referred to as Obamacare, saying the program is too costly and intrusive.

He is also refusing to set up an insurance exchange in the state for private individuals who will have to buy insurance or be fined. Residents will have access to federal exchanges.

Expanding Medicaid in Louisiana would have insured an additional 400,000 people. The federal government would have covered the cost of that expansion for up to three years, a deal that Hood said is mistaken to bypass. Critics have argued that the long-term cost of Medicaid expansion is unknown.

QUESTIONS REMAIN

Experts say that there's still a lot to learn about the partnerships.

Opelka said the key issue for the state in choosing the reforms is ensuring optimal care is provided to patients. But the details of the agreements are still being hammered out, and all may not be known until contracts are signed.

“There are more questions than answers right now,” said Mollye Demosthenidy, an assistant professor at Tulane University and health care reform expert.

Hood is critical of the partnerships, saying the deals sound more like a form of privatization, with the state turning over management of its charity hospitals to private companies.

Hood also criticized state officials for making major reforms to Louisiana's indigent-care system behind closed doors.

Normally big overhauls like what's being done to the charity system would be taken before the Legislature and addressed by a committee of experts and lawmakers. Instead, the reforms, prompted by Medicaid shortfalls, were taken up suddenly and outside the regular legislative session. The partnership deals that will eventually determine how the hospitals are run are being negotiated in secret.

Hood said he too called for reform of the state charity system in a 2007 report he authored for the Public Affairs Research Council of Louisiana, a state watchdog group. He proposed maintaining a few of the teaching hospitals within the charity system while transitioning to community-based care in other markets.

'FEELING PRESSURED'

But he stressed that health care coverage for the uninsured needed to be expanded before undertaking any reform of the charity system, an option that the state is turning down by refusing the Medicaid expansion.

Sachs said that the right public-private partnerships can bring a lot of expertise and resources to the table.

He added that there are other provisions under the Affordable Health Care Act that could help ensure that uninsured patients still get the care they need. Provisions aim to better monitor hospitals that claim not-for-profit status and receive tax breaks to ensure that they are actually undertaking a charity mission and caring for the uninsured.

“The state cannot afford the system as it stands now. It is a very expensive system,” Bourgeois said.

“The alliance between those facilities is a good thing if the details all work out. But there’s still a ball up in the air, and no one has caught it yet,” Bourgeois said.

Keeping Chabert open was a main goal of the partnership, and it will ensure that the care it provides is still available, jobs stay in the community and its valuable medical education program continues to operate, he said.

“All the communities affected are feeling pressured,” Sachs said. “But change is occurring rapidly across the country in health care. Out of this disruption, I hope we will see a much better approach.”

Staff Wrtier Nikki Buskey can be reached at 857-2205 or nicole.buskey@houmatoday.com.1>

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